TalkTalk admitted last week that it is still struggling with customer service and technical issues - a year after the launch of its 'free broadband forever' offer.

The Observer has been keeping up the pressure on the company through our 'Why Are We Waiting?' campaign, after being deluged with letters and emails over the last year from frustrated customers who have been paying for a broadband connection they have never received.

Now the company - the landline arm of Carphone Warehouse - has conceded in a trading statement to the City that its problems are not yet over. The company says that, as a result, it will be ploughing an extra £10m to £15m into meeting 'additional customer service costs' this year. Unless the results are immediate, this will do little to appease existing customers, who continue to write to us on a daily basis with a variety of technical problems. All are frustrated by a lack of response from TalkTalk.

The company launched its broadband and landline package to much fanfare in April last year. Householders who signed up to an 18-month landline contract at £20 a month were to be given a 'free' high-speed broadband connection. Yet many of those customers have never received a connection, despite paying for it, and others who did receive one have now been cut off.

Charles and Annie Pierson have been waiting for a broadband connection on their TalkTalk landline since October. 'We got the Mac code [needed to transfer from one provider to another] from BT in September and gave it to TalkTalk, but waited and waited and nothing happened,' says Mr Pierson. 'We have rung and emailed to try to find out what the problem is, but we have been presented with a catalogue of different reasons. It's like a Kafkaesque situation where you go around in circles, never getting any closer to a resolution.' TalkTalk is now looking at the Piersons' case.

After its customer service woes continually made headlines late last year, the company virtually stopped signing up new clients. But in January it launched a new high-profile advertising campaign. Last week's statement showed that it has signed up just over 2.2 million broadband customers, although more than two-thirds of these have still to be moved from BT to TalkTalk's own network.

'We have 3,000 or 4,000 complaints a year, which is about the same as everyone else in the industry,' TalkTalk's managing director, David Thatcher, told The Observer. 'But even if you have a tiny proportion of failure, it is still a big number of very upset folk.' He says people are now being connected 'within a few weeks'.

Last month we reported that the telecoms firm had begun to pay out hundreds of pounds in compensation to frustrated customers, often triggered by the launch of small claims court actions. The Observer's postbag suggests the company is continuing with this strategy.

Shôn Young, an officer with the Metropolitan Police, signed up for TalkTalk in April last year but, nine months later, was still being told by the company that his line was incompatible with broadband. 'I had broadband on my line before, so I knew this wasn't true,' he says. 'After months of letters, emails and phone calls between myself and TalkTalk, I got a call from the "escalations" department in Preston. The person I dealt with there apologised, admitted that they had got it wrong and asked what they could do to put things right.' Mr Young and his wife received £200 as a settlement from TalkTalk.

Another Observer reader, an IT technician, was also one of the first to sign up to the free broadband offer a year ago. After weeks of waiting for the start-up pack to arrive, he fixed what he says was faulty software and a broken modem and all seemed well - until October, when he lost his connection.

'We contacted TalkTalk a number of times to fix the problem and ended up waiting in on numerous occasions for a succession of BT engineers to look at it,' he says. 'Eventually I wrote to TalkTalk by recorded delivery threatening to terminate the contract if they did not fix things. No reply.' Two months and three unacknowledged letters later, our reader switched back to BT - but continued to receive bills from TalkTalk.

'So I issued a small claim for £877 at Guildford County Court, which included £500 for my time. No reply,' he says. 'Two weeks later, TalkTalk's time to reply to the court ran out and I applied for and received a county court judgment against them. According to the person I phoned at the court, if they haven't paid up by next week I can send the bailiffs in.'

A new report by price comparison website simplyswitch.com shows that broadband providers now offer almost six times better value for money than they did before TalkTalk introduced its free broadband offer a year ago, while firsthelpline.com, another comparison website, says increasing numbers of people are passing up cheap, basic broadband packages for those offering faster speeds and unlimited downloads.

· The Why Are We Waiting campaign aims to help readers get results from companies that have consistently kept them waiting for a service. We also want to hear from you if you have resolved any problems with firms who have been keeping you at arm's length. Write to us at why.are.we.waiting@observer.co.uk with the company's name in the subject field.